Expert Advice - Submitted by Lindy Lear
For Ian Hosking Richards and myself we use our experience when guiding investors towards making sound investment decisions. Here are some general principles to consider if these types of news stories worry you.
1.The crystal ball
If we all had a crystal ball we would all be property multi millionaires by now. Those who have reached that status, even without a crystal ball, show us that experience is a great teacher. When It is time to make a decision, experienced investors make a series of judgements based on the information available, the criteria they have set for selecting the property, and their strategy for achieving their goals. If the boxes are ticked, they take action and buy. They seem to be able to "know" or have a "formula" that works based on their real life experiences. For Ian he focuses on the drivers for future growth in an area and then buys the best opportunity available. So it makes sense for newer investors without experience to learn from the successful investor as they grow their confidence to move forward and invest.
2. Using headlines when making decisions
One thing successful investors do not do is make decisions based on the headlines.. If you rely too much on the general news media, you may find yourself going hot and cold about making a decision on a property. You may miss opportunities out there and at worst become a chronic procrastinator and keep waiting for the perfect property. For every doom and gloom headline that sells a newspaper story, I am sure there are investors who end their dream based on the fear and negativity these headlines generate. Be like the successful, stay informed by looking for balanced in depth expert reports, and do your own due diligence and do not rely on the headlines. Know your criteria, your strategy and your goals.
3.Putting information into perspective
Doing your due diligence is a must when investing, however many investors overload themselves with so much information that they become confused. They have no-one to filter all the information and help it make sense. Speaking to someone more experienced can help put it into perspective. Suddenly you can see the wood for the trees. So while due diligence on an area or a property is very important, run it by someone who knows the area and has invested there. It is better to take advice from someone who has put their money where their mouth is.
4. See The big picture
After making a decision to buy a property often buyer’s remorse sets in, particularly if you see a headline like “The Resource Boom is over”. From then on all you see is negatives everywhere. If you have sought advice from someone experienced let them balance the negatives and give you the bigger picture about the economic and other drivers that make that area a great investment choice. Property is a long term investment and daily headlines are not a good indicator of what an area will do over time.
7. Get reassurance to be able to sleep at night.
Getting reassurance from someone you trust who has the track record and knows and has invested in that area is recommended when you start to get nervous. Make sure you have all the information you need and all your questions answered so you are confident to make an informed decision. Then you will be able to sleep at night while your property portfolio grows happily by itself
Is the Resources Boom Over?
From Ian: “The doom and gloom merchants who say that the ‘mining boom is over’ seem to be referring to the capital investment stage of the resource cycle. Whilst billions upon billions of dollars have already been spent or are in the pipeline, this stage of the cycle was never going to last forever. In the coming years, as these massive infrastructure projects go from the investment stage to the production phase, the large increases in production will largely offset the slowdown in infrastructure investment. This is all to be expected and is part of the normal cycle.”
Ian Hosking Richards is presenting at the Melbourne Property Forum hosted by Your Investment Property Magazine in February 2013. If you want to hear more on this topic it would be a must attend event. Go to the Rocket website to find out how to obtain special discount tickets.
Lindy Lear is a successful property investor who had a late start into investing, yet has grown her portfolio to eight properties in three years. She is a qualified property advisor and general manager of Rocket Property Group, and she won the Reader’s Choice Award in 2009 and 2012 for Property Investment Advisor of the Year. Lindy is passionate about helping others realise their goals through investing in property, and can be contacted at 02 8012 9669 or visit www.rocketpropertygroup.com.au
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